Google News
spot_img

Digital payments to surge by 88 % by 2026: Shiprocket Report

Must Read

While digital payments will surge, cash transactions are expected to decrease by 34% as per a comprehensive report on Indian eCommerce ecosystem released by e-commerce enablement unicorn Shiprocket at Shiprocket SHIVIR 2023

New Delhi: By 2026, digital payments are anticipated to surge by 88 % while cash transactions are expected to decrease by 34 %, as per a report released by e-commerce enablement platform Shiprocket on Friday. This rise in digital payments is primarily driven by the increasing popularity of Unified Payments Interface (UPI), the report added.

eCommerce enablement unicorn Shiprocket released an insightful report on Indian eCommerce ecosystem, covering its current state, market dynamics, and challenges at the fourth edition of Shiprocket SHIVIR held at Pullman, Aerocity in New Delhi today. Titled, ‘eCommerce in the new Bharat and its future,’ the report is supported by ONDC in association with IndiaRetailing.com.

Unveiled by T Koshy, managing director and chief executive officer, Open Network for Digital Commerce (ONDC); Saahil Goel, co-founder and chief executive officer, Shiprocket; and Bhavesh Pitroda, chief executive officer, Images Group, the comprehensive report explores the surge of online marketplaces, the digital revolution driving the grassroots economy, and the impact of mobile technology on consumer behaviour. From digital payments to logistics innovations and government initiatives, it uncovers the critical elements fueling eCommerce growth in New Bharat.

Here are some key takeaways from the report:

Indian eCommerce projection
The Indian eCommerce industry is poised for significant growth, projected to increase from $75 billion in 2022 to $350 billion by 2030. By 2034, it may even surpass the US to become the second-largest eCommerce market.
– By 2026, cash transactions are expected to decrease by 34 %, while digital payments are anticipated to surge by 88 %. This rise in digital payments is primarily driven by the increasing popularity of Unified Payments Interface (UPI).
– Efficient logistics, both domestically and internationally, is currently the most significant challenge (as agreed by 38 % of brands surveyed) in the eCommerce sector. Timely delivery plays a crucial role in determining efficiency.
– The demand for suitable e-commerce enablers to strengthen supply chains, enhance logistics efficiency, and ensure secure payment ecosystems is on the rise. Among these enablers, SHIPROCKET ranks in the top three, as recognized by brand surveyed.
– The Indian D2C (direct-to-consumer) market is expected to experience substantial growth, increasing fivefold from $12 billion in 2022 to $60 billion by 2027, with an impressive growth rate of around 40 %.
– The Open Network for Digital Commerce (ONDC) is poised to be a pivotal game-changer in the Indian eCommerce market. Once it achieves a certain level of scale, it has the potential to trigger a price war among eCommerce players.

2. Consumer and brands
In India, 76 % of consumers we surveyed prefer to prepay for their online orders, resorting to cash-on-delivery (COD) only when uncertain. However, for brands, the usage of COD payments has remained relatively stable over the years, showing no significant decline or surge.
– Brands have the potential to convert 88 % of consumers to prepay for their online orders by offering attractive discounts.
– Among the prepay options, UPI is the most favoured choice for 57 % of consumers, closely followed by credit cards at 31 %.
– A considerable 80 % of online shoppers prefer to make their purchases from marketplaces, which also happen to be the primary sales channel for brands.
– The top three categories preferred by online shoppers are fashion and accessories (48 %), electronics (32%), and grocery (30 %).
– Both Indian (43%) and international (38 %) consumers find ‘delayed delivery’ to be the most frustrating online shopping experience.
– More than half of Indian consumers prioritize ‘Quality’ when shopping online, while international consumers (68%) expect a combination of factors such as price, trust, quality, delivery, and reviews and ratings from any online shopping website.
– Surprisingly, 72% of Indian brands do not sell internationally, presenting significant opportunities for expansion. However, 38 % of brands are uncertain about how to sell overseas, while the USA remains an appealing market for another 38 % of brands.
– Both Indian and international consumers show a keen interest in shopping for Indian products abroad, with over 60 % engaging in such purchases.
– A considerable percentage of consumers and brands (ranging from 70 to 80+) prioritize sustainability and environmental consciousness.

3. Consumption and retail
– The per capita consumption, projected to reach $2,948 by 2030, will play a crucial role in propelling the Indian eCommerce market forward.
– The present Indian retail market, valued at $930 billion in 2022, is anticipated to grow at a Compound Annual Growth Rate (CAGR) of approximately 10 percent, reaching $1,930 billion by 2030.

Shiprocket survey
The report also includes insights uncovered by an online survey of consumers who are regular shoppers on brand sites as well as marketplaces, and brands operating in the eCommerce segment. Conducted by SHIPROCKET, the survey covered responses from 1,000 Indian and 500 international shoppers, as well as 500 brands across categories – beauty, lifestyle, fashion, food, FMCG, electronics and others. The idea of surveying both brands and consumers aimed at incorporating perspective of both sides – demand and supply.

From multinationals to newly launched D2C brands, the survey has a healthy mix of respondents sharing their eCommerce journey citing challenges faced so far, and growing expectations from service providers and enablers to help their business gain a stronghold in time to come. The consumer survey results are focused on specifics of shoppers’ behaviour, preferences and expectations in the new age of Indian eCommerce. The survey findings have been judiciously encapsulated within relevant sections of this report.

The report also includes:
1. An in-depth look of the eCommerce market in India and its disruptors.
2. Insights on cash-on-delivery (COD), consumer behaviour and expectations, and cross-border logistics.
3. A narrative on the new beacon of online retail and ONDC (Open Network for Digital Commerce) – the game changer.

Shiprocket SHIVIR 2023 was the meeting ground for more than 100 speakers, over 1000 attendees and over 500 brands. The summit offered unparalleled opportunities for knowledge-sharing and networking.

Shiprocket Shivir

Latest News

Killer Jeans maker KKCL to invest Rs 35 cr in FY25 on capacity expansion, new stores

KKCL had cash of Rs 390 crore in its books and is paying the Rs 166 crore for the...